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2010 U.S. Oil Reserves Rise – No Peak Oil?

The 2010 figures are out for oil reserves in the United States and they have risen. What does this mean for the peak oil theory? Not much at all and here is why.

More Oil Reserves?

Ernst & Young has published a report showing oil reserves in the United States increased by 11 percent to 17.8 billion barrels of oil in 2010. That’s a nice percentage and would seem to be a lot of oil. Peak oil deniers are suggesting this is a sign peak oil doesn’t exist. Alas, we are talking apples and oranges here.

Oil Production vs. Reserves

Oil reserves have nothing to do with the concept of peak oil for better or for worse. Let me give you an example. Peak oil refers to the production of oil at any one time. Reserves are an entirely different subject with a host of complexities related to overestimates on fields, recovery factors and so on. It’s an apples and oranges argument as mentioned previously.

More Production?

The basic argument is that oil reserves have increased by about 2 billion barrels. The United States uses about 18 million barrels a day. So, are we talking about a major increase in our reserves here? Not really. At 18 million a day, we would be looking at 120 days of additional oil. That certainly sounds like a solution to peak!

Quality of Oil Reserves

How could oil reserves be going up if the United States peaked in the early 1970s? The reserves in question are coming from the alternative oil resources such as shale and tar sands. While this is generally good news, the oil is of low quality and very expensive to produce. The volume of oil that can be produced from it is also low because of the huge amount of water needed. In short, these reserves will never produce enough per day to even make a dent in our thirst. As I write this, Texas has had to halt much of its shale production because of water shortages. This will be an ongoing trend.

Is the increase in U.S. oil reserves a sign that peak oil is a lark? Sadly, the answer is no, but at least the figures show some positive change.

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